Strategic Procurement in the Post-Sourcing Era (Determine)
Face it sourcing, CPOs just aren’t that into you.
Last week, the team from Ardent Partners shared the results of their research: CPO Rising 2018: The Age of Intelligence in a webinar with Determine. This year’s report includes input from 324 participants, 62% of which are Director level, VP level, or C-level. No one industry accounted for more than 13% of the research data, although approximately 70% of the responses were from large (>$1B) companies in North America.
Of all the insights drawn from this initial look at the research results, one stands out to me as particularly compelling: sourcing is being de-emphasized as a spend management strategy.
Falling from #1 in 2009, to #7 in 2014, to #11 this year, the trend is impossible to ignore. This doesn’t mean that sourcing isn’t still being applied to a significant portion of addressable spend; the percentage of spend brought under management using strategic sourcing actually hasn’t changed that much from 2009, falling from 65.7% to 55.8% to 46.9% respectively in the same years as listed above. The difference is that as of 2018, sourcing is no longer a top 10 strategy for leading CPOs.
There are multiple implications of this shift, and while it has been coming on gradually but steadily for almost a decade, some procurement organizations may still be caught off guard. Introspective teams would do well to ask themselves a few questions — and give very careful thought to the answers.
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